Novartis Explores Mergers in the US Amid Strategic Review

Strategic Insights -

Novartis, a Swiss pharmaceuticals group, is undergoing a strategic review, which involves exploring potential mergers in the US. One potential deal being considered is with American Home Products (AHP), a company that is likely to lose its merger with Warner-Lambert. Novartis is also reportedly considering an approach to Pharmacia & Upjohn (P&U), a US-Swedish group that has agreed to merge with Monsanto. However, both deals face significant challenges and are still in the early stages of discussion.

Key Takeaways:

  • Novartis is exploring mergers in the US as part of its strategic review.
  • One potential deal being considered is with American Home Products (AHP), which is likely to lose its merger with Warner-Lambert.
  • Novartis is also considering an approach to Pharmacia & Upjohn (P&U), despite concerns over the structure of the deal among Monsanto shareholders.
  • AHP is currently barred from soliciting interest from other companies until its deal with Warner-Lambert is officially called off.
  • Analysts say that Novartis is attracted to AHP's highly regarded drugs pipeline and may be concerned about the impact on its own Cyclosporin drug.
  • Novartis has just announced a merger of its agrochemicals arm with AstraZeneca's, forming Syngenta, which may influence its approach to AHP's agricultural chemicals business.

Statistics:

  • Novartis is considering a deal worth over $1.8bn with Pfizer to acquire Warner-Lambert's assets.
  • AHP has a highly regarded drugs pipeline, which is a major draw for Novartis.
  • Novartis has a relatively weak presence in the US market, where it plans to list on the stock exchange later this year.

Sources:

  • "'"The Sunday Times", unspecified date